Australian car industry needs to transform by 2020 – report
September 18, 2009 by Matt Brogan
A report published yesterday by Deloitte’s Global Manufacturing Industry Group says that by the year 2020, vehicle manufactures based in six major markets, will account for 90 per cent of global automotive sales.
The report A new era: Accelerating toward 2020 — an automotive industry transformed details a new global balance that will have more competitors headquartered in emerging manufacturing hubs such as China and India, shifting away from the mix of 15 major players today in four markets.
Deloitte Manufacturing partner, Mr Damon Cantwell believes that while this indicates continued pressure on Australia’s automotive sector, there are proactive strategies that companies can adopt.
These include perspectives on the major technology developments, structural changes, shifts in consumer preferences and the workforce trends which are expected to transform the global automotive industry over the next decade. The report also provides signposts for the sustainability of the Australian industry.
“From a vehicle manufacturer viewpoint, the focus on changing the model mix produced locally will need to continue, with our study predicting alternatively-powered vehicles representing one third of new car sales in developed markets by 2020,” said Mr Cantwell.
“From a component manufacturer perspective, the regional appetite for technology and design services will also present significant opportunities for progressive Australian companies over the medium term.”
The race for electric vehicles too is heating up. By 2020, electrical vehicles and other “green” cars will represent up to a third of total global sales in developed markets and up to 20 percent in urban areas of emerging markets.
“In the Australian context, this makes the introduction of hybrid production models a crucial bridge that keeps Australia in the game,” said Mr Cantwell.
“Australia needs to be careful it does not lag behind other markets but takes the initiative and focuses on niche export opportunities as emerging markets start to demand more luxury vehicles where more complex skill sets are needed in the workforce.”
The report details seven major global consumer trends for the automotive industry as it heads towards 2020, including:
- Conscious consumption – a growing emphasis on value
- Moving up – the emergence of new wealth in emerging markets, consumer shifting from economy to luxury cars
- Shades of green – cost versus consciousness
- Safety first – consumers to be attentive to innovations
- Staying connected – the need to be networked
- The web – internet as a sales channel
- Changing preferences – older, more urban consumers
“Dramatic changes in consumer buying preferences will play out according to the differences that will develop between mature and emerging markets. Consumers will fragment into distinctly different segments by 2020,” said Mr Cantwell.
Attitudes altered by the recession will continue to evolve in mature markets. Advancements in alternative technologies will also transform consumer mobility altogether. In these markets consumers will demand that their vehicles are connected to their computers, mobile phones, work and home.
The industry changes foreshadowed also emphasises the critical role of skills in the new global automotive sector.
“This means the need to attract highly skilled talent will intensify leading up to 2020. It is the companies and governments that embrace new and comprehensive approaches to workforce flexibility which will succeed,” added Mr Cantwell.
Importantly, the Report also highlights the increasing role that government will play in regard to the post-recession global automotive industry.
“The study underlines the importance of a directional role for government in its policy settings – it is not simply about throwing money at the industry,” Mr Cantwell observed.
“In the Australian context, it can be argued that the policy and program fundamentals are in place, and it is critical that the local industry engage with these opportunities, and that government responds accordingly.”
The report can be read in full by clicking here.
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What the… An article about the Australian Car Industry and the first picture is of a Toyota being built. Aren’t Holden and Ford the only Australian companies. TVFPIC. ;-)
LOL. Anti spam = Toyota.
U noticed that as well. But evwen though i hate Toyota i know they are vital to our economy as well as Holden and Ford. Toyota and Holden both have either electric or hybrid vehicles ready, now all we need is Ford to hurry along and were set.
Devils’ Advocate – which planet are you on? Toyota is just as much of an Australian car manufacturer as Ford and Holden, and sells nearly twice as many vehicles as the other two combined.
And builds a more reliable and better quality car
Typical comment from a Toyota bogan fan quality of Toyotas is no better than Holden or Ford.
Didn’t you notice TVFPIC (Tongue Very Firmly Planted In Cheek, ie in JEST etc), not to mention the wink?? What is wrong Australia these days. The land of sarcasm etc is turning into America, “sarcasm, what is that? etc etc”. Not to mention people are now calling a bonnet a ‘hood’, a guard a ‘fender’, a foot path a ’sidewalk’ etc etc. Goodbye dinky di Australia, I will miss you.
I will now spell it out for people who couldn’t work out from the 2 hints that I was joking. It was a dig at the many blind posters on this site who think that only Ford and Holden are Australian manufacturers. As far as I am concerned, Toyota is no less Australian than the other two. They employ locals, they help with engineering of models for the world wide market and the big one which the blinker wearers don’t want to acknowledge, the Toyota twins have a higher percentage of Australian made content than the car that “goes better” and “means a great deal to Australia”.
I am sorry, I will try not to be sarcastic etc again in the future. ;-) :-) (NOTE THE WINK AND THE SMILE. I hope I don’t have to spell that out for people too TVFPIC)
Just a pity that very few of the vehicles that Toyota sell are made in Australia. Sales of their local car, the 4 & 6 cyl Camry are pitiful in the overall scheme of things. (And, yes I do know that they call the 6 cyl Camry the Aurion in Oz, but that doesn’t change what it is).
Sorry DA, getting overloaded with acronyms of late, your TVFPIC just got lost in the fog.
:-)
I feel the success of large size sedans in Australia makes holden and ford reluctant to make major and necessary changes in these few years. Only when things really turn bad, they start to try to close the gap of their products and the more popular and smaller sedans from other companies. So, finally they have to change. Hope it is not too late.
No matter how much the Aussie car landscape will change, our large sedans will always have a place on the sales charts(no matter how little they sell). there is no other car that can match their interstate touring ability and many cars dont look as good(Commodore and Falcon). I really love our large sedans and i hate how all this regulation is choking power and torque outputs and making the companies put so much effort into making these cars accpetable by Euro V/VI/VII whatever standards. Long live the Falcodore.
How are the current regulations choking power and torque outputs etc Shak? The current Aussie made 6s (Falcon/Commodore/Aurion) have more power and torque now than what they EVER have. Not to mention the base models have better performance etc than the high performance factory ’sports’ variants of the same cars 15-20 years ago… Crikey, even the new 3.0L SIDI VE has similar power to the 5.0L HSV Clubsport from the early 90s! Doesn’t look that bad to me…
Yes, the Aussie large sedans have fantastic interstate touring ability (overtaking for eg is easy), but they can be matched and beaten for comfort. I know of a few smaller cars that are more comfortable than the BA/BF etc Falcon on a long trip. The HUGE transmission tunnel means your legs are skewed to the right when in the drivers seat(have not driven a FG yet however I have heard the transmission tunnel is not as intrusive, can anyone confirm this?). Not good for the lower back etc. When I had to drive work’s BF from Townsville to Cairns I couldn’t wait to get out of it. In that short 350 or so kms, my back was killing me and I couldn’t get comfortable no matter how much I adjusted things. This wasn’t in a base model either. Even my ‘driving partner’ had similar issues in not being able to get comfortable. It just has an un-natural driving position. For information, I have done over 1600km in 2 days in our Mazda 6 and had no issues with a sore lower back or anything like that. It is a similar situation with the work Commodores as the transmission tunnel doesn’t seem to intrude as much.
I think that the “locals” make fantastic touring cars. They are very comfortable and efficent. While I cant vouch for the falcon, I’ve done interstate runs in many commodores including a VE Omega. I fould the seats and driving position to be absolutely ideal, the suspension was well matched, very little road noise and roomy. Local cars generally have decent aerodynamics, tall gear ratios and “lean cruise” modes for extended periods of highway driving(I’m not sure if the later cars have this but I know that commodores from the early 90’s onwards could lean out the fuel/air ratios as far as 16:1).
Besides, many front wheel drive cars have a fair sized transmission tunnel anyway because it strenghthens the chassis.
I think for too long Australia has been in a little cubbard locked up being able to accept ineffeciency as their was little competition in the past. We could also rely on that most other countries weren’t too interested in making a effort to get a market here because we were small enough and isolated enough not to matter. This had its advantages but now Australia is perhaps where it should of always been, a player in the world marketplace with great potential. We are a clever and sensible people but the mindset of old does need to change very much to make it. It should not just be the WWII Axis powers (Japan, Germany, Italy) that are the major players in the NCIO (New Car Industry Order) but Australia could be a representative from the English-speaking world.
Increase productivity… reduce tax payer assistance… but that will never happen with muppets like Kim Carr and Co.
The government makes alot more money from the Australian car industry then it hands out.
While Holden, Ford and Toyota are the “pin-up boys” for the industry, the vast amount of the 60,000+ jobs in the industry are in SUPPLYING the components for the Falcodoriouns. The government will always tip in some money to make the car manufactures balance sheets add up because if the manufactures fold, the government will lose the supply base and ALOT more revenue.
Also, the 60,000 jobs are direct employment. According the the Bracks car industry review, if car manufacturing packed up and left, the joblosses would be more like 200,000 because this includes all of the “hidden jobs” that support the industry.
Yet we will again face a resources shortage in the sectors whose revenue makes or breaks this country – minerals & O&G.
Why can’t we make car manufacturer’s genuinly competitive. Liberalized IR laws would have helped (dare I say “work choices”??). Also local gov’ts need to put their money where their mouths are – why are we getting government vehicles which are made overseas?